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Revolution in Web Advertisements?

What do you think the next revolution in web-based ads will be?

I can think of three words:
Targeted
Targeted
Targeted

But seriously; I think we all know that if we have a site based on gardening we’re not going to make any money (end of sentence? ) if we’re showing ‘click here to get 20% off your next footlocker(TM) purchase’.

I think it’s easy to broadly target your audience – utilities such as WebTrends can give you overall statistics including:
Web Browser
Physical Location (of the IP address, not necessarily the end-user)
Time Spent on Site
Etc.

However that doesn’t give you anything terribly useful unless you can easily derive new ad revenue from those statistics (e.g. if 95% of your users are using Netscape 3.5 and are from Malaysia you could potentially show a bunch of ads on eyeglass repair in Kuala Lumpur) – most people can’t easily show that sort of an ad based upon the meager statistics.

But I think the *future* of web-based advertising are not only targeted ads but personalized ads. I’m talking things like Yahoo does (or used to). When you’d go to Yahoo and search for “Golf Equipment” not only would you get a list of sites that sold golf equipment but the banner and text ads at the top would switch to golf ads. That’s certainly a step in the right direction – instead of showing hum-drum ‘get your 30th Visa Card here’ it’s showing something a user is LOOKING FOR.

The same way you need to tailor your ads to what your users are looking for.. And I’m not talking ‘ok this part of my site should have this ad’ I’m talking about what the user expects – what the user has seen / viewed before.

As an example let’s take a sports-based discussion forum (no clue why I picked that! ). A user enters the page from the main site. They click the Baltimore Orioles forum and then click a couple threads. The first two they back out of but the third one they spend 5 minutes reading. They then click back to the main site and leave.

What have we learned from this experience?
1) The user has not been here before (I will answer how later)
2) The user was not interested in the content of the first two threads
3) But the user was very interested in the third thread (making a few assumptions)

How can we use this data?
Currently we can’t really glean much information from a single viewing. However, place a cookie on their computer with a unique identifier and then we can start building a user profile. We can start recording WHICH forums they frequent and for HOW LONG. So if Bob visits the Yankee’s forum every Monday morning for an hour and reads threads about Mike Mussina we could show him ads showcasing Mike Mussina memorabilia. By reading his IP, we could tell where he is from – thereby giving him a pop-up if we have tickets available for the Yankee’s away game in his city since he doesn’t live in New York.

Along with hidden or ‘passive’ gathering we can perform a series of ‘active’ information gathering prompted by the user. We can pop up a quick and easy survey with a few questions like:
What is your favorite sports team?
Do you play sports? If so, which ones?
Etc.

If we wanted to be VERY fancy we could even say ‘Over the last few weeks we’ve shown you these ads:
Ad 1
Ad 2
Ad 3

And you’ve clicked on them this many times. XY Z 2 3 1 3. Could you please tell us why you liked this ad vs. the other? On a scale of 1 to 5 rate each ad on these features’ etc.

These can all help us build a visitor profile that we can anonymously send to our advertisers to request information. However what this requires is either an in-house solution or a very, very smart ad agency.

The in-house solution sounds to me to be the most logical and feasible step at this point in time. There exist log analyzer / data warehouse software which will:
1) read your log files and tie past users to current ones via a cookie that you instruct your web server to log along with page information (the universal ID I spoke of). Failing that it will make an educated guess using IP address, browser type and version, etc.
2) add all of the ‘click-stream’ information into a data warehouse for reporting
3) make business decisions based upon that

So we aggregate all of our information on say a nightly basis so that when Bob comes back the next day we have had time to build an updated profile and acquire the required ads that we expect he will like.

However these are terribly expensive. However I think web logs are the way to go. I *could* log each request in the database itself but that is creating duplicate information (it’s in the logs anyway) and cause my application to slow down (since the DB has to log each request). Maybe open-source alternatives to those exist?

For an agency-supplied solution I think it would work something like before except the agency’s banner ad would have to set the cookie and work from there. Also, there would have to be significant site interaction (via XML or something else) for the agency’s systems to intelligently parse a thread and figure out what it is.
Anyone else have any ideas, comments, questions, etc.?

FYI; I was thinking mainly of ad content, not ad delivery. Maximizing banner ads, pop-unders, interterstiles, etc. are topics for a different thread. But I'll say a couple words on it; make things incredibly annoying for your users and two things will happen:
1) clicks will go up
2) views will go down

Of course people will click it the first time.. however they will probably get terribly annoyed and unless your content is unique they aren't going to need to stick around.

You could say '1 out of every 100 posts has one of these in it'. Just the sheer numbers of eyeballs looking at posts all day (it will interrupt their flow causing them to look at them) will bring about some clicks. On-the-fly integration (e.g. on a Flyers forum thread talking about the pending Lindros trade have latest news about Lindros, or the Flyers/Oilers, etc. in one of those integrated ads) would be TOTALLY cool!

But I think the *future* of web-based advertising are not only targeted ads but personalized ads. I’m talking things like Yahoo does (or used to). When you’d go to Yahoo and search for “Golf Equipment” not only would you get a list of sites that sold golf equipment but the banner and text ads at the top would switch to golf ads. That’s certainly a step in the right direction – instead of showing hum-drum ‘get your 30th Visa Card here’ it’s showing something a user is LOOKING FOR.

Dave Morgan Launches True Audience; Software Will Generate More Advertising Income For Web Publishers By Quantifying Site Audiences

Dave Morgan, the founder and former CEO of Real Media, today launches True Audience, a new software company that will enable web publishers to generate more advertising income by putting quantifiable values on their site traffic. True Audience will produce and license an "audience management" system for content publishers that captures, manages and monetizes audience data across all of a site's publishing and marketing channels.

True Audience is an enterprise software system that retrieves audience data from various publishing applications such as content servers, ad servers, e mail, sweepstakes, site registration, subscriptions, etc and aggregates the information to provide actionable profiles of individual site visitors, and finally, a total audience profile. By collecting and adding age, gender and zip code to the composite profiles of each visitor, True Audience can then help publishers identify which segments of their audience are of higher value to prospective advertisers. Providing advertisers with extraordinary efficiency in reaching highly segmented target groups, will enable web publishers to raise the CPM they get for the most valuable parts of their audience.

"To compete for a larger share of ad dollars, online media companies need to better demonstrate the premium value of online advertising in terms other than strict direct-response metrics," says Mr. Morgan. "True Audience will provide the tools that enable web publishers to qualify, quantify and package their audiences in ways traditional advertisers know how to buy, such as 'gross ratings points,' 'designated market areas' (DMAs) and 'recency/frequency/monetary value'."

"Marketers want to reach people, not page views," says Peter Weinberger, President of Advance Internet, a company that is evaluating True Audience's beta version. "In the short-term, we believe that rich audience data will be tremendously beneficial for online media companies; in the long-term it may become the key definition of the value of the online media together with our branded content. Leading media companies will talk to marketers in their own language and learn to better demonstrate the role of the online media in the overall marketing mix, including online brand effectiveness."

Weather.com, a division of The Weather Channel, is also evaluating the True Audience product.

The True Audience product offers a number of advantages over existing audience measurement products. Since it is a software system, its audience data is true and actionable, unlike audience measurement services that are based on projected panel data. Unlike large, customized customer relationship management programs that often cost upwards of a million dollars and are not tailored for the unique needs of media companies, the True Audience is specifically built for the needs of online media companies and will be licensed to publishers for approximately $100,000 a year. Consulting and support services are expected to run another $50,000 a year. Upgrades and additional modules that provide greater functionality and higher value will be sold separately.

"Our goal is to provide a product that pays for itself relatively quickly," says Bradford Burnham, True Audience's Chairman and CFO. "It is unrealistic in this economic environment for content publishers to spend hundreds of thousands or millions of dollars to understand their audiences, no matter critical it may be to their businesses. True Audience is a turn-key, very affordable program that will quickly self-liquidate from the additional ad revenue it helps generate."

Mr. Morgan, who founded Real Media in 1995 and built it into a global company of 380 employees in 25 offices in 19 countries before leaving in June, 2001, launches True Audience with a team of highly experienced new media and technology executives including:

Bradford Burnham, CFO -- was a general partner of AT&T Ventures, an early stage, technology oriented venture capital partnership with $350,000,000 under management across three funds;

Dominic Schmitt, Product Development -- former VP/Product Development at Barnes&Noble.com, Director of eCommerce for the NBA and spent more than five years with Times Mirror Magazines as a multimedia producer, director, and Internet group general manager;

Greg Gendron, VP/Business Development -- former VP/Services, Real Media, where he had previously served as Managing Director, Real Media Latin America, VP/Business Development, and VP/Marketing.

True Audience (http://www.trueaudience.com), based in New York, initially has been funded by Messrs Morgan and Burnham. The company is in discussions with a number of potential investors for its first full round of funding.

Certainly TrueAudience is approaching what I think the 'net needs however it still treats your visitors as a whole (looking at the sample reports it seems to say these demographics visited this section of your site) -- I think it needs a more individualized approach.

"How can I maximize my ad revenue?" is the question that is asked; this solution is only partial -- it only gives you a tiny piece of the puzzle. What is needed are ads based on INDIVIDUAL users -- so my demographic report might say users 18 - 22 visit this forum so I can set up a particular ad for that forum... However what about the other multitudes who aren't in that demographic? They will see that targetted ad and may not respond.